Ava School of Learning obtained a charter at the start of the year that authoriz

Question

Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $10. During the year, the following selected transactions occurred from four individuals and issued 5 900 shares of common stock to each a. Collected S49 cash per share b. Issued 6,900 shares of common stock to an outside investor at $49 cash per share c. Issued 8,900 shares of preferred stock at $16 cash per share. Required: 1. Prepare the journal entries indicated for each of these transactions, (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account f View transaction list Journal entry worksheet Record the issuance to four individuals of 5,900 shares each of common stock with no par value for a price of $49 per share.

Explanation / Answer

date Account titles & Explanation Debit Credit Amount in $ Amount in $ a Collected $49 per each share from four individuals by issuing 5900 shares each Cash A/c    (4*5900*$49) 1156400         To Common Stock 1156400 (being common stock issued for cash) b Cash A/c    (6900*$49) 338100         To Common Stock 338100 (being common stock issued for cash) c Cash A/c   (8900*$16) 142400        To Prefered stock ($10 Par)    8900*$10 89000         To paid in capital In excess of par - Prefered stock 53400 (Being Prefered stock issued at premium) (b) Stock Holders equity Section AVA School Balance sheet (Partial) At december 31 Stock holders equity Amount in $ Contributed capital Common stock , No par Value, 30500 issued at $49 1494500 Prefered stock , par value $10 per share , 8900 issued 89000 paid in capital In excess of par - Prefered stock 53400 Total Contributed capital 1636900 Retained earnings Net Income 45000 Total Shares holders equity 1681900

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